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Giverny Capital Asset Management, LLC, an investment management company, recently published its first-quarter 2025 investor letter. A copy of the letter can be downloaded here. The portfolio returned -3.39% in the quarter, compared to a -4.27% return for the S&P 500 Total Return Index. For the year ended March 31, 2025, the fund returned 1.75% compared to an 8.25% return for the Index during the same period. For more information on the fund’s best picks in 2025, please check its top five holdings.
In its first quarter 2025 investor letter, Giverny Capital Asset Management highlighted stocks such as Arista Networks, Inc. (NYSE:ANET). Arista Networks, Inc. (NYSE:ANET) is a technology company that engages in the development and distribution of data-driven, client-to-cloud networking solutions. The one-month return of Arista Networks Inc (NYSE:ANET) was -14.19%, and its shares gained 10.74% of their value over the last 52 weeks. On April 17, 2025, Arista Networks Inc (NYSE:ANET) stock closed at $71.20 per share with a market capitalization of $89.401 billion.
Giverny Capital Asset Management stated the following regarding Arista Networks Inc (NYSE:ANET) in its Q1 2025 investor letter:
"During the quarter we added modestly to our holding in Arista Networks Inc (NYSE:ANET) after a substantial drop in its stock price. Arista makes high-end computer networking equipment used in hyperscale cloud computing and Artificial Intelligence (AI) data centers. Arista’s stock price rose roughly 10 times from our inception in April 2020 through January, but subsequently has been cut by about 40%. This is mainly due to skepticism about whether AI data centers can generate good enough economic returns to justify a multi-year build-out."
A technician in a server room managing a large-scale network of computers.
Arista Networks Inc (NYSE:ANET) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 78 hedge fund portfolios held Arista Networks Inc (NYSE:ANET) at the end of the fourth quarter which was 70 in the previous quarter. While we acknowledge the potential of Arista Networks Inc (NYSE:ANET) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we covered Arista Networks Inc (NYSE:ANET) and discussed the list of best hardware stocks to buy. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.